Citibank analysts (NYSE: C) has said for the last three weeks, investors have been net buyers issued by Greece, Spain, Portugal and Ireland, despite the peripheral European countries facing widening deficits.
For the first time in weeks, investors have also turned into net sellers of benchmark German bonds for the first time in several weeks, based on trading flow data that’s come through the bank. Citibank did not provide values for the trading that it monitored.
Next week, finance ministers in the European Union will discuss whether or not any bailout of Greece should be funded by issuing E.U. bonds guaranteed by the member country’s governments.
“The mood seems to have improved following relatively good news, such as political support for Greece,” said Robert Crossley, a fixed-income strategist at Citigroup’s London operations. “We feel such optimism is unwarranted in the medium term, but short term there is no fighting the market.”
Greek Prime Minister George Papandreou announced plans last week to reduce the country’s budget deficit by an additional 4.8 billion euros. The troubled country may receive a 55 billion-euro bailout from the European Union, reported a Kurier newspaper on Friday.
